In a loss for the struggling taxi industry, a federal appeals court has ruled that Uber's entry into the Philadelphia transportation market did not run afoul of antitrust laws despite causing a precipitous drop in the value of taxicab medallions.

A unanimous three-judge panel of the U.S. Court of Appeals for the Third Circuit ruled Tuesday that the Philadelphia Taxi Association and 80 individual taxicab companies failed to show that Uber violated the Sherman Act by depressing competition. The precedent-setting decision affirmed a holding by the U.S. District Court for the Eastern District of Pennsylvania.

Uber is facing suits across the country, including in Florida, California and Massachusetts, contending that its practices are anti-competitive. Although some of those cases involve only state competition law claims, the Third Circuit's decision could make those battles even more challenging for taxi companies.

The traditional taxi companies had contended that, not only had Uber entered the market without proper regulatory approval, but the company's practices also caused the value of their medallions—which are required for taxi drivers in Philadelphia—to drop from $545,000 to $80,000 in two years.

Third Circuit Judge Marjorie Rendell, who wrote the court's 26-page opinion, said that was not evidence of anti-competitive behavior and pointed out that the taxi companies failed to show that the consumer suffered.

“Inundating the Philadelphia taxicab market with Uber vehicles, even if it served to eliminate competitors, was not anti-competitive,” Rendell said. “Rather, this bolstered competition by offering customers lower prices, more available taxicabs, and a high-tech alternative to the customary method of hailing taxicabs and paying for rides.”

In Philadelphia, the taxi companies alleged that Uber had not obtained proper regulatory approval before starting operations in Philadelphia, and contended that the company operated illegally for two years. They complained this allowed Uber to avoid purchasing medallions, paying minimum wage to its drivers, or paying for proper vehicle insurance.

The conduct, the companies alleged, constituted unfair competition that caused the taxicab industry to lose more than 1,200 cab drivers to Uber and 15 percent of cab drivers to lose their medallions to lenders through financial defaults.

Rendell, however, wrote that the conduct reflected a competitive business model, and, although the taxi companies lost significant market share, the conduct did not show any intention to monopolize the Philadelphia market. When considering antitrust claims, courts need to focus on whether the conduct harmed the consumer, she emphasized.

“While Uber's alleged conduct might have formed the basis of a regulatory violation, its knowledge of existing regulations alone cannot reasonably be said to demonstrate specific intent to monopolize,” Rendell said. “Further, Uber's choice to distinguish itself from other vehicles-for-hire, eschewing medallions in favor of independent drivers who operate their own cars at will, can instead be reasonably viewed as 'predominantly motivated by legitimate business aims.'”

Philadelphia attorney John Innelli, who argued for the cab companies, did not immediately return a call for comment.

Steven Reed of Morgan, Lewis & Bockius argued for Uber. A spokesman for Uber declined to comment.